Brussels, 15 December 2016 – The European Parliament Environment Committee (ENVI) voted this morning on the revision of EU Emissions Trading System (EU ETS). The European Steel Association (EUROFER) believes that there are many more steps to be taken before the EU ETS for the fourth trading period (2021-30) comes close to being fit for purpose.
“This morning’s vote is a small step on a much longer journey. MEPs have produced a Report that in some ways tries to balance climate protection whilst limiting the impact upon industrial competitiveness. There is a lot of room for improvement”, said Axel Eggert, Director General of EUROFER.
“Industry stands by its position that at least at the level of the 10% best performing steel installations, there must be no direct or indirect costs resulting from the system. Jobs and investment will continue suffer if even the best steel plants in Europe have no chance of reaching the target,” said Mr Eggert.
There are positive parts of the Report. For instance, flexibility in the distribution of allowances between auctioning and free allocation is essential to provide more carbon leakage protection to the whole industry’s value chain. Additionally, the exemption from the ‘cross sectoral correction factor’ for sectors most exposed to international competition is a sensible step.
However, there are very tangible negatives. The text retains the artificial flat rates on benchmarks and does not address the issue of waste gases. It also does not provide any structural solution for the issue of indirect costs. This is because it introduces a very limited harmonised scheme which puts further at stake the competitiveness of EU electro-intensive industries in a future period where carbon prices are forecast to be much higher. Finally, the level of ambition has been raised significantly because of the higher linear reduction factor of 2.4%, the doubling of the intake rate of the Market Stability Reserve, and the cancellation of at least 800 million allowances. These measures come at a time when priority should have been given to the implementation of the 2030 package.
“As we stated before the vote: even though MEPs have adapted the original Commission there will still be a significant shortage in allowances for the 10% best performing plants, and on average a 25% shortage for the steel sector as a whole in phase four”, concluded Mr Eggert. “Much more work is required in the coming months to make the EU ETS viable. We will support MEPs and other policy makers in subsequent steps of the legislative process to make this happen”.
Charles de Lusignan, Communications Manager, +32 2 738 79 35, (email@example.com)
A PDF of this Press Release is available: here
EUROFER is located in Brussels and was founded in 1976. It represents the entirety of steel production in the European Union. EUROFER members are steel companies and national steel federations throughout the EU. The major steel companies and national steel federations in Switzerland and Turkey are associate members.
The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €170 billion and directly employs 320,000 highly-skilled people, producing on average 170 million tonnes of steel per year. More than 500 steel production sites across 24 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.
Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.